On the Price of Sugars
A producer of fermentation products can choose feedstocks with different purities (Fig. 1). As the purity goes up, the price is higher, and processing costs are lower, allowing the producer to define economically optimal conditions. Both refined white sugar and raw sugar are traded. White sugar is traded in London at the London Futures Exchange (LIFFE) The contract is known as the No 5 contract and is traded in US$/metric ton. Raw sugar is traded in New York at the Intercontinental Exchange (ICE) The contract is known as the No 11 contract and is traded in USc/lb.
The charts of the trade prices for refined white sugar and raw sugar can be obtained easily from the following link: http://www.sugartech.co.za/sugarprice/
No published trade prices for feedstocks with lower purities that could be of interest (e.g. molasses, starch, thick beet juice and syrup) have been found. Without any doubt, if traded, producers of fermentation products should have this information. In not traded, at least sugar producers know the production cost of purifying the intermediate, from which then a market value can be calculated.
Figure 1: Feedstock price and processing costs as a function of the purity of different feedstocks (Ref. “Opportunities for the fermentation-based chemical industry. An analysis of the market potential and competitiveness of North-West Europe.”, Deloitte, September 2014).
When analyzing the charts (see Figs. 2 and 3), the following is observed:
Raw sugar (Price in cent/lb.):
The average value varies from 9 cent/lb. in 1991 to 18 cent/lb. in 2016 (determined by using an approximate linear regression). Actual price (24-feb-16): 14,24 cent/lb.
When converted in $/tn., we obtain the following values: $ 198/tn. – $ 396/tn. – $ 313/tn. (simply multiply by 22).
Figure 2: Trading price of raw sugar during the last 25 years (in USc/lb).
White sugar (Price in $/tn.):
The average value varies from $ 275/tn. in 1991 to $ 475/tn. in 2016 (determined by using an approximate linear regression). Actual price (24-feb-16): $ 405,30/tn.
Figure 3: Trading price of white sugar during the last 25 years (in US$/Tn).
Combining both charts, by linear regression, we obtain approximately the following values. The actual value has been included for comparison.
|Values in $/tn.||1991 value
Table 1: Representative values for 1991 and 2016, with the actual value, and comparison between raw and refined white sugar trade values.
In the following report past values and forecasts of up till 2024 are included:
From the tables in the report, the following average values can be calculated (in $/tn.):
|Price in $/Tn.||Historic||Recent||Forecast|
|NOMINAL VALUES||Average 1988 – 2005||Average 2006 – 2016||Average 2017 – 2024|
|Difference raw / white||79,96||91,18||77,52|
Table 2: Average trade prices in the past (1998 – 2005 and 2006 – 2016) and forecasted (2017-2024), including a comparison between raw and refined white sugar trade values.
The forecast value for the period 2017 – 2024 is slightly lower (20 $/tn for raw sugar and 35 $/tn for white sugar) than the average values for the period 2006 – 2016. If we take into account that these are nominal values, we can speak of a true price reduction for the coming years.
White sugar, in the last 25 years, has a max. price around 800 $/tn. and a min. price around $ 160/tn. (at this moment raw sugar dropped to 88 $/tn., maintaining the previously mentioned difference).
Therefore, both white and raw sugar have highly speculative trade values. However, the difference between both remains quite constant, having an approximate value of 80 – 90 $/tn.
Sugar and Sweeteners Yearbook Tables:
Sugar and Sweeteners Outlook:
Sugar: World Markets and Trade:
OECD-FAO Agricultural Outlook 2015-2024: